Printer Friendly

MONEY SMALL INVESTOR INDEX: INVESTORS SURGE INTO HOT NEW ISSUES; TURN SOUR ON GOLD

 /ADVANCE/ NEW YORK, Sept. 5 /PRNewswire/ -- Attracted by the highly publicized returns of new stocks such as Snapple Beverage, small investors are pouring money into first-time issues at a record pace, according to data gathered for Money magazine's Small Investor Index.
 So far this year 409 companies have publicly sold their stock for the first time, raising $24.7 billion, according to Securities Data Co., a stock research firm in Newark, N.J. That compares to a record 516 firms that went public in all of 1992, attracting a total of $24 billion. Experts estimate that individuals, buying shares on their own or through mutual funds, account for more than half of the money pouring into new issues.
 The stocks' appeal to small investors is obvious: Securities Data reports that the average share in this year's initial public offerings has gained 25.4 percent from its opening price, vs. a 7.9 percent gain for the S&P 500 so far this year. Some new issues have done even better than that, including the well-known cases of Snapple (up over 1,000 percent from its December 1992 offering) and Best Power Technology, which makes communications equipment (up 86 percent since it was first sold last month). Analysts warn, however, that such unproven stocks are extremely risky. Norman Fosback, editor of the newsletter New Issues, says: "If the stock market drops, new issues will fall twice as far." Fosback advises small investors to hold off buying hot new stocks until they have dropped below their initial offering price.
 Last week, the Money Small Investor Index, which tracks the typical individual's holdings, rose $160 to a record $47,788. Stocks gained $110, while bonds returned $44. CDs and money-market funds added $9, and gold lost $5.
 This Last Year % Change from a
 Week Week Ago Week Ago Year Ago
 106.53 106.18 96.79 +0.34% +10.07%
 Latest Changes for Each Asset
 % Change from a
 Category Index Week Ago Year Ago
 Stocks:
 NYSE 107.91 +0.12% +13.55%
 ASE/OTC 110.59 +2.36 +30.23
 Equity funds 110.01 +0.60 +16.94
 Bonds:
 Taxable bonds 109.57 +0.27 +10.83
 Municipals 109.71 +0.36 +11.57
 Bond funds 109.25 +0.52 +9.62
 Cash:
 CDs 102.39 +0.07 +3.61
 Money funds 101.67 +0.05 +2.56
 Other:
 Real estate 98.33 +0.32 -1.93
 Gold 149.08 -1.45 +36.79
 Jan. 1, 1993 equals 100
 Where Average Small Investors Have Their Money Now
 Current Year Ago Current Year Ago
 NYSE 21.26% 21.43% Bond funds 7.69% 6.60%
 ASE/OTC 6.72 6.77 CDs 13.22 15.77
 Equity funds 8.06 5.95 Money funds 24.43 24.63
 Taxable bonds 9.73 9.80 Real estate 0.91 0.80
 Municipals 7.28 7.72 Gold 0.69 0.53
 Sources: Bank Rate Monitor, the Federal Reserve, Investment Company Institute, Lehman Bros., Lipper Analytical Services, Merrill Lynch, Money Fund Report, Morgan Stanley Capital International, National Association of Real Estate Investment Trusts, Prudential Asset Management, Standard & Poor's, Robert Stanger & Co., World Gold Council.
 -0- 9/6/93
 /NOTE TO EDITORS: This material is also available in printable form from AP GraphicsNet and Access services for graphics and tables (under the file name MoneyIndex) and from PR Newswire for full text./
 /CONTACT: Jordan Goodman of MONEY, 212-522-3618, or Patti Straus of MONEY public relations, 212-522-2695/


CO: ST: IN: SU: ECO

GK -- NY035 -- 8888 09/03/93 14:19 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Sep 3, 1993
Words:593
Previous Article:THE PRINCIPAL SECRET TOPS $2.25 MILLION IN FOUR HOURS ON QVC
Next Article:TEXAS UTILITIES ELECTRIC CO.'S $700 MILLION SENIOR DEBT SHELF RATED 'BBB' BY FITCH -- FITCH FINANCIAL WIRE --
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters